12 July 2015

The usual suspects………...

As the Greece 'debt crisis' slowly unravels another story caught my eye and I have to admit I wasn't surprised by its contents. But, before I explain, let me repeat an old joke about accountants which goes:

A business wants to borrow money and the bank wants to make sure that the lending is secure so asks to see a summary of the business's accounts. The owner of the business goes to see his accountant and asks 'How do the accounts look?' to which the accountant answers, 'How do you want them to look?'.

So, back to Greece and a story in the Independent about Goldman Sachs (who else?) who reportedly made hundreds of millions of $ whilst advising Greece on their entry into the single currency. It seems that Goldman Sachs may have hidden the truth about the Greek economy behind a wall of complex deals allowing the Greeks to enter the single currency which, in turn, allowed Greece to borrow more.

Now, there are two sides to this story, if it proves to be true. On the one hand, Goldman Sachs may have lashed up some sort of story for Greece (which I am sure they will argue was completely within the rules) but the bigwigs in Brussels and the European Central Bank should also have done their due diligence and spotted the story-telling, but they didn't.

So who is the real author of the present shit-storm? I'd suggest that its the banking institutions and advisors who all make humungous amounts of money without any accountability. Sure, we all need to live within our means but the institutions need to play their part and regulate for stability. Instead of which, as before, making money in the short term trumps longer term stability. Greed and venality again.